4% wage increase is actually a bit above US averages. 2008 salary increase budgets are 3.9% as
reported by the just published 35th Annual WorldatWork Salary Budget Survey. Increase budgets for 2009 are projected to be the same 3.9%.
highest rate of increases, 4% was found in
The lowest average pay increases, 3.7% were found in
performers are given raises of 5% while employees with poor performance can
only expect 2%.
A 3.9% wage increase is not going to create a huge jump in
take home pay for most employees. Even
5% for the best performers is not likely to seem like a big reward. Tight
increase budgets make it essential for employers to be good communicators. Tell
employees what the increase means before they see it in a paycheck.
exceeding expectations. Remind the employee who earned 2% of the steps they
need to take to improve their performance.
You don’t have to give a raise to the poorest performers just because
everyone else is getting one. A 2% increase makes a statement; no increase makes
an even stronger statement. If you fire
for not meeting the standards of a performance improvement plan 3 months after
he received a 3.5% raise your actions will look inconsistent and could raise
questions. Employees always seem to know what the person at the next
desk earns even with company policies that state that salary information is
confidential. Employees talk, payroll and human resources don’t freely hand out
this information. When you clearly communicate the policy and reasons for
individual increases you are better prepared to respond to questions. What are the tough questions you have to
answer about raises?